High Court ruling allowing prosecution of former Southern Water executives over alleged £45 million fraud

High Court clears way for landmark prosecution over alleged sewage monitoring fraud at Southern Water.

Today, the High Court judgment confirms the Environment Agency’s power to prosecute seven former Southern Water employees, including the company’s former Chief Executive, over allegations they conspired to manipulate sewage monitoring data, enabling Southern Water to avoid an estimated £45 million in penalties while securing company and individual performance bonuses.

The ruling clears the way for the Environment Agency’s prosecution to proceed ahead of a criminal trial due to begin in September. The High Court also refused the defendants’ application for anonymity, confirming that those facing prosecution can be publicly identified.

The Environment Agency alleges that between 2019 and 2021 former Southern Water employees systematically manipulated environmental monitoring by tankering sewage away before inspections, doctoring monitoring data, switching off monitors, falsely recording “no flow” conditions and misleading Environment Agency officers.

According to the High Court judgment, the Environment Agency alleges the fraud involved the deliberate manipulation of wastewater treatment works to undermine the regulatory controls of the wastewater quality monitoring system for which the Environment Agency is responsible. The Environment Agency further alleges that the deception enabled Southern Water to under-report sewage spills, avoid penalties estimated at more than £45 million, and secure company and individual performance bonuses to which those involved were allegedly not entitled.

The alleged irregularities were first identified by Peter Hammond of Windrush Against Sewage Pollution (WASP), whose forensic investigation helped uncover the alleged manipulation of sewage monitoring data and bring the matter to the Environment Agency’s attention.

“Today’s judgment is a victory for the Environment Agency and a welcome sign that our environmental regulator is beginning to show real teeth. The High Court has confirmed the EA’s power to hold individual executives, as well as water companies, to account for alleged fraud linked to environmental regulation. We also pay tribute to Peter Hammond of Windrush Against Sewage Pollution, whose investigation helped expose the alleged manipulation of sewage monitoring data and bring it to the Environment Agency’s attention.

The allegations at the heart of this case represent an egregious abuse of power. According to the Environment Agency, senior figures at Southern Water deceived regulators, enabling the company to avoid tens of millions of pounds in penalties while securing financial rewards. The prospect of executives facing criminal prosecution should send shockwaves through the water industry. But it should not have taken five years to reach this point. We need faster enforcement so that those responsible cannot simply move on before the law catches up with them.

We now call on the Prime Minister and the Secretary of State for the Environment to ensure the Environment Agency has the resources and backing to pursue polluters without fear or favour and make personal accountability the norm for environmental crime.”

CEO of River Action, James Wallace 

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